About Solimar Energy / Corporate History

Corporate History

Solimar Energy Limited (“Solimar Energy”) was the new name approved by Livingstone Petroleum Limited’s (“Livingstone Petroleum”) shareholders at a General Meeting on 29 June 2007.  This followed an announcement on 10 May 2007 that Livingstone Petroleum had entered into an agreement to acquire Solimar Energy, a private oil & gas company with interests in several oil and gas prospects in the State of California.

Livingstone Petroleum was incorporated on 17 December 2004 listed on the ASX on 14 September 2005.  Livingstone Petroleum Ltd was incorporated on 17 December 2004. By prospectus dated 13 January 2005 the Company undertook a $750,000 capital raising through the issue of partly paid shares. The purpose of this raising was to facilitate the evaluation and potential acquisition of oil and gas projects. On 1 June 2005, the Company agreed to acquire a 50% interest in the Forbes Joint Venture Gas Project (in the Sacramento Basin, onshore California, USA) from Orchard Petroleum Inc, which owns the remaining 50% of the Project and is the Operator. The Company subsequently made a call on the partly paid shares raising a further $2.25 million. These funds paid for the acquisition of the 50% interest in the Forbes Gas Project, leaving the Company with a cash balance of approximately $1.7 million at 30 June 2005. The Company lodged an IPO prospectus on 11 August 2005 to raise $3m, which was closed oversubscribed on 31 August. The Company was listed on the Australian Stock Exchange on 14 September 2005.

On 10 May 2007, Livingstone Petroleum announced that it had entered into an agreement to acquire Solimar Energy, a private oil & gas company with interests in several oil and gas prospects in the State of California.  This agreement was subsequently approved by shareholders at a General Meeting on 29 June 2007.

Solimar Energy had assembled an attractive portfolio of petroleum assets which offers a variety of exploration targets from low risk exploration plays to high impact exploration opportunities.

This acquisition also injected approximately A$4.8 million cash into Livingstone at year end, 30 June 2007. 

The Solimar Energy acquisition is consistent with Livingstone’s strategy of focussing on onshore California which the company believes is highly prospective and compliments Livingstone’s existing Californian petroleum assets.“

The highlights of Solimar Energy’s prospects involve:

Ventura South Flank (16.50%)

• Located adjacent to the Ventura Avenue field – one of the largest onshore oil fields in North America.
• Resolution of land ownership issues have opened up highly prospective acreage that has been under explored to date.
• First well is a follow-up to a 1935 well that was previously abandoned due to antiquated operations and technology. This well had major oil and gas shows during drilling.
• Significant prize in the order of over 40 million barrels of recoverable reserves potential.

Aquaduct Fan (10%)

• Acreage position adjacent to a potentially large onshore oil discovery.
• High impact exploration prospect with over 200 million barrels of recoverable reserves potential.

Maricopa (100%)

• A low risk oil development project within one of the largest onshore oil fields in the world (Midway Sunset).
• The project has three potential development/appraisal objectives with varying degrees of risk and upside potential.
• Established infrastructure which expedites development and enhances economic returns.

Deer Creek (100%)

• Located in close proximity to two existing analog fields with targeted structures at relatively shallow depths (4,000 ft).
• Reserve estimates are 3–6 million barrels recoverable.

On 18 May 2007, Livingstone announced that it had reached an agreement with Orchard Petroleum Limited (“Orchard”) to separate their respective interests in the Forbes Joint Venture.  Under this agreement:

•  Livingstone will acquire 100% of Orchard’s Buckeye and the Arbuckle leases (Livingstone formerly held 50% of these areas under the Forbes Joint Venture).

• Orchard will acquire 100% of the balance of the Forbes project areas, including the Larner 1-12 well, the Larner 2-12 well and the Edge 1-10 well.

• The South Buckeye well will continue to be jointly held (50/50) between Orchard and Livingstone. Orchard will arrange flow testing as soon as practicable to determine if the gas intervals seen on electric logs are commercial.

• Orchard will transfer to Livingstone its 50% interest in the Block B lease at Southeast Lost Hills (San Joaquin basin), including Southeast Lost Hills (SELH) wells 1-13, 2-13, 3-13 and 1-12 and the uncompleted pipeline. Livingstone will become operator of this project, with the other 50% held by Nuenco NL.

• Livingstone will pay Orchard US$163,500 (principally reimbursement of pre-paid lease rentals on the Buckeye project) and US$100,000 for Livingstone’s 50% share of the South Buckeye well completion costs. Orchard will release Livingstone from approximately US$600,000 in respect to past drilling expenses.

This Agreement enables Livingstone and Orchard to separately pursue the project areas of most interest to each of the companies. It increases Livingstone’s interest in key projects, namely Buckeye and Arbuckle, plus adds Southeast Lost Hills as a new project. Livingstone is also in a better position to farm-out these projects, if desired.